Welcome to the 244th edition of Trade War.
Trump plays footsie with China on tariffs and suggests a TikTok deal could avert trade war. Banned by Beijing, Secretary of State Marco Rubio gets a phone call—but with a reprimanding tone—from Chinese foreign minister Wang Yi.
Nervous US companies mull their future in China. And in Washington for the Trump inauguration, Chinese vice president Han Zheng meets with Elon Musk and other business executives, telling them to “seize the opportunity, share the fruits of China’s development.”
Chinese EV exports to Europe grow and BYD, Geely, and SAIC file court challenges against EU tariffs. Under pressure from US, Europe renews economic coercion case against China over its punishment of Lithuania. And tech world shocked by powerful new Chinese AI model DeepSeek.
Notable/In Depth ~
Lending to households “tepid,” up only one percent
China second only to US in its low reliance on exports for domestic jobs
China meets its green goals six years early while Trump guts American efforts
Trump plays footsie on tariffs
Trump is playing footsie with Chinese leader Xi Jinping on tariffs. The latest: speaking in an interview on Fox News, the U.S. president said he would “rather not” impose tariffs on China.
“We have one very big power over China, and that’s tariffs, and they don’t want them,” Trump said to Fox News host Sean Hannity in an interview that aired Thursday. “And I’d rather not have to use it. But it’s a tremendous power over China.”
That came just two days after Trump threatened 10 percent tariffs on China if it didn’t do a better job controlling the flow of fentanyl into the U.S. And before that Trump said he was considering imposing 60 percent tariffs on China, during the presidential campaign.
Trump also continued his long-running habit of praising Xi and bragging about the two leaders’ close relationship.
“I had a great relationship with him prior to Covid,” he said in the Fox New interview. “They are a very ambitious country. He’s a very ambitious man.”
At this point it’s pretty obvious: If Trump is able to pull off what he thinks is a worthy deal with China, he is more than willing to bend on not just tariffs, but on the TikTok ban, on human rights and very possibly on the fate of Taiwan. And the presence of tough-on-China advisors in his administration like Secretary of State Marco Rubio is unlikely to temper that tendency, as I pointed out earlier this week.
“The ultimate decision-maker is Trump, and if China gives Trump what he thinks he needs, those hawkish people and their beliefs will quickly be sidelined and they may not have influence on U.S.-China policy,” I told VOA by phone on Tuesday.
“If China comes through with what Trump views as concessions that are good for him and the U.S., he is very likely not to pursue those tariffs right away,” I said in another call with VOA, a day later after Trump threatened the 10 percent tariffs.
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